World's Energy

May 6, 2009 - MOSCOW (Reuters) - U.S. energy giant Exxon Mobil said on Wednesday it has not yet agreed to sell gas from its Sakhalin-1 project to Russia's Gazprom, denying earlier media reports about the deal. Japanese daily Nikkei reported earlier this week that Sakhalin-1 would sell 20 percent of its gas to Gazprom, citing unnamed sources. The price of sales -- the main sticking point in the talks -- had yet to be agreed, it said. "Exxon Mobil has confirmed that Sakhalin-1 consortium is still in discussions with Gazprom on potential sales of gas from Sakhalin-1 project, but no sales and purchase agreement has been signed yet," Exxon Mobil spokeswoman Dilyara Sydykova said. Exxon Mobil operates Sakhalin-1, on the Russian Pacific coast island of the same name, in cooperation with Russian state oil firm Rosneft, Japan's Itochu, Marubeni and India's ONGC. Gazprom has long said it needs the gas produced at Sakahlin-1 to cover domestic needs, while Exxon says it is looking for the best price and has eyed major importer China for some time. The project has been producing oil for several years and reached peak production of 11.2 million tonnes in 2007. It has been producing gas since 2005 and shipping small volumes to continental Russia. It has signed a deal to supply China with 8 billion cubic metres (bcm) of gas a year and hopes to start the supplies next decade.